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Budget 2017: Growing forward or growing pains?

For anyone involved with the food sector, the most recent federal budget was filled with optimism. Ottawa has made a point to make the agri-food sector a place to invest and foster innovation. In fact, it aims to grow Canada’s agri-food exports to at least $75 billion annually by 2025 and make our country a trading powerhouse. Given we already export over $56 billion worth of agri-food products, $75 billion does not seem like much. Still, we have underachieved long enough and it is time to think differently about our agri-food potential.

Innovation was the overarching theme of this budget, with the word appearing on nearly every page of the document. Some provisions were more specifically allocated to research in genomics, while a modest sum was dedicated to research more broadly. Climate change was mentioned as an innovation driver. However, the document was unclear as to how funds would attempt to motivate the sector in making better connections between what we produce and what consumers are looking for. Developing new products for an increasingly diverse consumer-base is problematic. Loblaw and Agropur have seen great progress with new programs, and Ottawa should act as a catalyst to entice more companies to follow suit.

An important focus within the budget was logistics and supply chains, as moving products across the country is our greatest challenge when expanding our agri-food sector. More than $12 billion will be invested in gateways, ports, bridges and roads to make trading more efficient. This follows Harper’s wake-up call in 2005 when the government decided to invest in the Gateway and Corridor initiative. The Conservatives should be credited for drawing our attention to Canada’s logistical deficiencies and so should the Liberals for continuing the work.

Connectivity is also important. Following the CRTC’s recommendation a few months ago, Ottawa intends to invest $500 million to support the expansion of broadband connections in rural Canada. This is excellent news for our farmers who are increasingly becoming market savvy. Since markets can change in an instant these days, it is important to make every trading minute count. The other good news for processing is the elimination of tariffs on a wide-ranging list of ingredients including cereals and grains, fats and oils, fruits and vegetable and chocolate products. This could help processors save more than $200 million per year. This would make our sector cover approximately $700 million in annual imports and strengthen the competitiveness of Canadian agri-food manufacturers at home and abroad.

However, there were some disappointments. The budget does not suggest increasing trades between provinces, which is a significant challenge. There was also no mention of the crisis state of supply-managed sectors including dairy, poultry and eggs. The budget did not provide any suggestions on how Ottawa intends to modernize the Temporary Foreign Worker Program, which is critical for the agri-food sector. It also failed to mention how Ottawa intends to grow the industry for northern communities.

Finally, the budget document makes Growing Forward 3 a priority for 2018. Typically, we end up with a vague five-year plan. It has been more about growing pains than growing forward. Our past frameworks have been supported with a budget rarely exceeding $5 billion. In the United States, the uncompromising Farm Bill is a massive enterprise that is worth almost $1 trillion. Of course there are many things wrong with the Farm Bill, but at least Americans have a vision for their agri-food sector, which combines production with consumption. To grant Canada with such a similar, powerful vision the next installment of Growing Forward should be worth at least $100 billion over the next several years. That is the commitment the sector deserves in order to make a difference in the world.

If Ottawa wants to make Canada’s agri-food sector a leading economic engine for the country, the $75 billion target is merely a suggestion. It needs to make the proper investment to be taken seriously. It is time to back up the innovation and infrastructure portfolios with real policy changes to make our agri-food sector competitive. If we do so, the $75 billion by 2025 target should be around $100 billion.

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